MNI: Clarida Says Fed On Track To Raise Rates By End Of 2022

Federal Reserve Vice Chair Richard Clarida said Monday the Fed is on track to raise benchmark interest rates by the end of 2022 if the economy develops as he expects.

Core PCE inflation is running at 2.8% in the February 2020 to September 2021 period and projected to remain "moderately" above target for the next three years, meeting the Fed's threshold for liftoff, he said. The labor market by the end of 2022 will also have reached maximum employment "if the unemployment rate has declined by then to the SEP median of modal projections of 3.8%," he said in remarks prepared for a Brookings Institution webcast.

"While we are clearly a ways away from considering raising interest rates, if the outlooks for inflation and unemployment I summarized a moment ago turn out to be the actual outcomes realized over the forecast horizon, then I believe that these three necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022."